Hire in Italy

Most employment rules are mandatory and cannot be amended by the parties. The exception to this is if more favorable provisions are being provided to the employee.
Employers can lawfully and unilaterally adjust an employee’s role or position, provided the new role or position pertains to the same level and category of classification as was previously assigned to the employee.

Probationary periods (‘periodo di prova’) are common in Italy and the length varies depending on the terms of the applicable collective bargaining agreement (CBA). However, in all instances, the maximum term for a probationary period is six months.

• In principle, employees must work 40 hours per week, except when more favorable provisions are afforded the employees of National Collective Labor Agreements (NCLA). The duration of the weekly working time cannot exceed 48 hours a week, including overtime. This is to be calculated over a period not exceeding four months, unless the applicable NCLA increases such a period up to six months.

• Overtime work cannot exceed a threshold, as prescribed by the applicable NCLA or a maximum of 250 hours per annum. Overtime should only be requested on an occasional basis due to exceptional circumstances, technical requirements, productive reasons or particular events. Overtime must be paid to the employee with an increase of salary. Different rules may apply to middle managers and executives.

The annual gross salary is payable through 13 or 14 monthly instalments depending on the NCLA the employee is under. The 13th month is paid in December and the 14th month is paid in June.

For 2023, employees under the “Tertiary Distribution and Services” National Collective Bargaining Agreement (NCBA) are entitled to a EUR 350 one-off bonus. The bonus shall be paid in two tranches EUR 200 in January 2023 and EUR 150 in March 2023.

• Italian rules on dismissal are quite complex and subject to frequent material changes. The rules vary based on: 1) the headcount, 2) the reason for the dismissal, 3) the classification of the employee and 4) the date of hiring of the employee.

  To assess the proper procedure and determine the consequences of a dismissal, the following circumstances should be considered:

  1. The date of hiring of the employee; distinguishing if the employment started before 7 March 2015 (“old hiring”) or after such date (“new hiring”);

  2. Headcount of the employer; with “Big Employers” being considered organizations exceeding one of the following:

  • 15 employees in one location or in more locations within the same municipality
  • 60 employees within the Italian territory.

  3. Category of the employee, since the dismissal of executives follows different rules.

  Collective dismissal

  A collective dismissal occurs whenever a “big employer” does the the following:

  1. dismisses five or more employees;
  2. in the same business unit/more business units located in the same province;
  3. within a period of 120 days; and
  4. due to a reduction, reorganization or shutdown of the company’s business.

  Employees to be dismissed are chosen according to the criteria set out by the law or by the agreement reached with the applicable unions.

  Individual dismissal

  An individual dismissal must be communicated in writing and specify the relevant grounds.

  An employee can be lawfully dismissed if a just cause or a justified reason occurs, where:

  • A just cause occurs when an employee’s very serious misconduct makes the continuation of the employment relationship impossible.
  • A justified subjective reason is a breach of the employee’s duties but not so serious as to trigger a “just cause.”
  • An objective business reason is a reason concerning the productivity, the organization of the work or the operation of the company (e.g. the removal of the position where no other duties can be assigned to the employee).

  Executive dismissal

  Different rules apply to the dismissal of executives (‘dirigenti’). The executive’s dismissal is deemed to be justified only if it is as a result of one of the following:

  • objective reasons related to the employer’s economic, organizational and production-related needs
  • subjective reasons related to performance.

  Following serious misconduct, the ‘dirigente’ can be dismissed for just cause. When this happens, the termination is effective immediately and the ‘dirigente’ is not entitled to any notice period. Furthermore, whenever a dismissal is due to subjective reasons, a specific disciplinary procedure must be followed by the employer prior to serving the dismissal.

  Prohibited dismissals

  The following dismissals are prohibited and, as such, null and void. If these types of dismissals happen, the terminated employee has the right of reinstatement (even if executive) and is entitled to payment of all the salaries accrued from the dismissal date through the reinstatement:

  • dismissals based on retaliation or discriminatory reasons
  • dismissal of female workers from the announcement of her marriage until one year after its celebration
  • dismissal from the beginning of a pregnancy until one year after the birth in the case of female workers
  • dismissal of fathers who take paternity leave, from the duration of the leave until one year after the birth.

The employee’s notice period will usually be set out in the CBA and is calculated in accordance with the employee’s length of service, position and level in the company.
Garden leave does not exist under Italian law. Indeed, an employee has a right to maintain work, even during the notice period. Therefore, to continue paying salary t during the notice period without the employee working is only permitted with the consent of the employee.

In any case of termination, the employer must give the employee a severance indemnity (‘Trattamento di Fine Rapporto’ or TFR). For each year of service, the TFR requires payment of 1/13 of the annual gross global salary to the employee. During the employment, the TFR accruals are registered in the financial statements. Alternatively, upon the employee’s request, the accruals can be paid directly to a complementary pension fund. If this option is taken, there is no TFR payment due at the termination date.

The European Court of Justice stated in 2019 that companies must implement an objective, reliable and accessible system to record the working time of their employees.

• In Italy, unions are primarily organized by the industry sector. All employees within a specific industry belong to the same union, regardless of the function of their particular job or occupational qualifications.

An employment contract normally has an unlimited duration, with the Italian labor framework encouraging the hiring of permanent subordinate employees. However, there are various forms of subordinate employment contracts that allow, under certain conditions, some flexibility to employers and employees.

Employers can hire fixed-term employees for a maximum duration of 12 months, provided they do not exceed 20% of the total headcount. A different threshold can be set forth by the applicable NCLA. The maximum duration does not apply to fixed-term contracts entered into:

• to replace absentee employees
• to meet seasonal needs
• with employees over 55
• for startup reasons.

Fixed-term contracts can only go beyond 12 months, but not more than 24 months, including extensions and renewals, for the following reasons:

• If it is provided for by the collective agreements that are implemented; and
• If there is a requirement for technical, organizational, or productive needs that are recognized by the parties involved. This is applicable only if these needs are not covered by the collective agreements, and in any case, should be done before December 31st, 2024; and
• If there is a need to replace other employees.

A further term can be applied only if at least one of the above “temporary reasons” is present. In any case, this can be no longer than 24 months.

Furthermore, under certain conditions, an employee who works for an employer under a fixed-term contract for more than six months enjoys some rights to priority hiring if the employer is hiring permanently for the same duties.

Under a fixed-term contract, neither the employee nor the employer can terminate the employment before the expiration of the term unless in the case of just cause.

In Italy, every employee must undergo an initial medical examination before starting work.

Salary is paid at the end of the working month, as established in the company policies or by the NCBA. Italian law also provides for an annual 13th payment, paid for the Christmas holidays. This amount corresponds to one month’s remuneration. In addition, certain NCBAs or individual contracts may provide for the payment of a 14th payment, which is usually paid in July.

Italian law requires the net salary paid to employees must be stated in a pay slip, specifying the period of service which the salary refers to, the amount and the value of any overtime. The payslip must outline all the elements that constitute the amount paid, as well as all withholdings made in accordance with Italian law.

• All employees are entitled to a minimum of four weeks’ (20 days) paid annual holiday. CBAs and individual contracts may allow for a longer period of holiday leave. Minimum annual leave is not allowed to be replaced by a payment in lieu, except in cases where the employment contract is terminated.

  Carry Over Rules: Holiday can be rolled over into the next holiday year by the employee. There is no cap set on the total number of days that can be accrued by the employee.

• In the event of employee illness or injury, CBAs or individual contracts generally provide for a period of paid time off. During this leave, the employee is entitled to keep their job and to receive their salary in the proportion and for the period set out in any applicable CBA or the individual employment contract. After this period, the employer can dismiss the employee by giving notice. This period is generally between six and 12 months. This applies in cases of both a single period of sick leave and multiple periods.

  Statutory sick pay starts on the fourth day of sickness. The first three days are “waiting days” and are typically paid in full by the employer. Statutory sick pay is capped at a maximum of 180 days per calendar year. Between the fourth and 20th day of illness, the statutory sick pay amount is, generally, equal to 50% of average daily pay. This moves up to 66% between the 21st and 180th day. During the sickness period, the employment continues to have legal effect. Consequently, all employee rights (such as seniority, holidays, permits, etc.) continue to be accrued by the employee.

The Carers’ Rights law in Italy provides for several kinds of paid ordinary or extraordinary leave entitlements for subordinate employees who are in one of the following categories:

• Employees who are parents or relatives of disabled children
• Employees who are married to (or have relatives who are) adult dependents, whose disability is of a serious nature and has been assessed by a state medical panel

Employees are entitled to request up to two years’ extraordinary leave. During this period, the employee receives a monthly amount equal to the normal monthly salary, up to a fixed gross annual threshold set up each year by the Ministry of Labor.

Additionally, all employees are entitled to three days’ paid leave per year in the case of death or documented serious illness of a spouse, a relative within the second degree or a stable cohabitant.

Each parent has the right to unpaid leave to take care of a sick child under three years old. However, the two parents cannot both take this period of leave at the same time. Each parent has the right to up to five days’ unpaid leave per year to take care of a sick child between three and eight years old. However, again, the two parents cannot both take this period of leave at the same time.

There are 12 public holidays in Italy, which are not included in the minimum holiday leave entitlement. However, any holidays falling on a weekend are not moved to a weekday. Major cities may also observe a regional holiday on the festival day of their patron saint.

• Maternity rights
  Female employees must not work for two months before nor three months following childbirth. This mandatory period of maternity leave can be shifted to up to five months used all after childbirth, if a medical certificate is produced.

  A female employee can request to go on early maternity leave in certain circumstances. For example, this applies if her duties involve lifting or moving heavy objects. In this case, a medical certificate is required, together with an authorization from the Employment Office. However, the employer’s consent is not needed.

  During the entire pregnancy, and for a period after childbirth, the employee must not be allocated tasks that may endanger her health.

  During maternity leave, employees receive an allowance from the National Social Security Body, equivalent to 80% of their salary.

  In cases of voluntary or therapeutic termination of pregnancy after 180 days from the beginning of the pregnancy or where the child dies during maternity leave or during the birth, female employees can return to work at any time with at least ten days’ notice to the employer. This allowance is subject to specific medical approval.

  After maternity leave, employees are entitled to return to the same job in which they were employed before taking the leave. Employers cannot dismiss female employees during pregnancy and until the child is one year old, except in certain circumstances.

  Additionally, the resignations and mutual termination agreements entered into with mothers during pregnancy or with parents of children under the age of three must always be validated and confirmed by such mothers or fathers through a special procedure.

  Failure to do this will render the resignation or mutual termination agreement ineffective.

  Paternity rights
  If the mother does not take her maternity leave (because of death, infirmity or the father having exclusive custody), the father is entitled to the entire or remaining period of maternity leave. This right is not applicable in any other circumstances.

  Employees on paternity leave are entitled to the same allowance, the same rights to return to their job after paternity leave and the same protections against dismissal as employees on maternity leave.

  Additionally, as of January 1, 2020, fathers must take ten days of paid paternity leave within five months of the child being born. They can also take a further day, within the same timeframe, in the place of the mother’s leave.

  Parental leave (optional leave)

  During the first 12 years of the child’s life, parents are entitled to take a period of absence to take care of their children. Parental leave can be taken by the mother and by the father for a maximum period of six months. Alternatively, the leave can be taken by one parent only for a maximum period of 10 months.

  Adoption rights

  Employees who have adopted children are entitled to take a three-month period of maternity or paternity leave during the first three months the child is integrated into the family. The adoptive parents are entitled to the same financial benefits as parents of natural children. They can also take parental leave, during the first three years that the child is in the family, for the same periods and with the same financial benefits as parents of natural children.

  Leave due to child’s illness

  During the first eight years of a child’s life, parents are entitled to be absent from work when their child is ill.